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Updated Jun 14, 2012 - 5:27 pm

Expert: Real estate 'shadow inventory' a myth

TEMPE, Ariz. - There's a big myth going around about Valley real estate, an expert said.

Right now, there are about 8,800 homes for sale in the Phoenix area, compared with 50,000 in 2008. Many people believe the low number is because banks are holding foreclosed homes off of the market in an effort to drive up Valley home prices.

Professor Michael Orr of the ASU Real Estate Studies Department doesn't believe that.

"I actually keep a file of exactly what houses the banks own and what they're doing with them," he said. "When you actually count them out, it's a relatively trivial amount that they actually own that they haven't already listed for sale."

As for banks having a so-called "shadow inventory," Orr said it's just not in the cards.

"It's not possible," he said. "To own a house, you have to have a deed. A trustee doing the foreclosure writes a deed and records it with the county. You can get those and examine them and see when the bank disposes of the property. It's not really 'in the shadows,' it's public information."

Orr said buyers shouldn't be worried that Valley housing prices will plummet when banks flood the market with foreclosures to sell because it's not going to happen.

"It's a bit like the Y2K problem," he said. "Everyone was really was really scared about that, but when [the year 2000] came around, nothing happened."

Orr said the same will be true for Valley real estate.

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About the Author


Years with the company: I started on January 2, 2006.

Education: I was born in San Antonio, Texas, but we moved to Phoenix when I was one-year-old in 1957. I grew up here and graduated from Alhambra High School and attended Phoenix College.

Family: I am married to my wife Rene', who is a librarian in the Washington school district. During free time, I may be found playing basketball in the driveway with my son, Devin. He's also keeping me busy with school, Little League, and playing in chess tournaments around the Valley.

Favorite food: Lots of favorite food, but our favorite restaurant is Fajitas.

Favorite spot in Arizona: The Little America Hotel in Flagstaff.

Favorite news memory: We have to go back to October 15, 1979. I was a country music air personality at KROP Radio in Brawley, California, when we had a 6.7 earthquake. Thankfully, there were no deaths and only minor injuries, but the entire community was pretty freaked out and listening to the station on their transistor radios. I would not want to go through an earthquake again, but it sure was a great night to work in radio and see how it can make a difference in people's lives.

First job: Working as a stringer for 'The Arizona Republic' at high school football games. My first real job was flipping burgers at the old Sandy's Hamburgers at 51st Avenue and Indian School Road. My first radio job was as announcer at KALJ radio in Yuma in 1977.

First concert: Doug Oldham gospel concert in the 1970s at the old East High School in Phoenix.

Favorite sports team: Phoenix Roadrunners minor league hockey. My dad took me to a game when I was in grade school, and I was hooked. I wanted to be a radio hockey play-by-play man. I used to take my cassette recorder and sit up in the rafters of the Coliseum and do play-by-play. It was great later in life to also take my son to Roadrunners games. Too bad the team just folded, I'll miss them. (Going to the Coyotes is fun, but they're not "my" team.)

Outside interests: My family and I are active in our church - Northern Hills Community Church in Phoenix. We enjoy going to movies, sporting events, and like to vacation at the Beach Cottages in the Pacific Beach area of San Diego. And I love to play catch, basketball, football with my son.

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